For immediate distribution
COVID-19: GCCI LOBBIES FOR ADDITIONAL SMALL BUSINESS STIMULUS
The Gladstone Chamber of Commerce & Industry Inc. (GCCI) attended an emergency round table meeting on Monday with representatives from local organisations to discuss COVID-19 and the devastating impacts it has had on the Gladstone Region.
GCCI’s President, Joe Smith, who was in attendance at the meeting, said, “We heard yesterday morning that cash flow is the most pressing issue that is being faced by both businesses who are able to trade (at reduced levels) and businesses who have had to close the doors due to restrictions on operating.
“Understanding the stimulus and how it will flow through to businesses was the second recurring issues. As an accountant, I of course understand the stimulus and how it will assist businesses, however others are having trouble with it. I see multiple issues with the current stimuli’s being made available.”
Issues with Announced Stimulus:
1. As the Cash Boost is being offset against PAYG Withholding amounts due, this will reduce the amount payable in BAS with the first cash flow benefit not being received until late April or into May. Some businesses will not be able to wait until then. If they are not able to operate their cash will likely be spent paying wages, leave entitlements and super, as well as loan repayments and other expenses. This is assuming there will be cash available to do so as many businesses do not carry significant reserves due to difficult economic conditions in recent years.
2. Business loans may be available to assist with cash flow, however, some businesses are not willing to go further into debt as they do not believe that they will be able to come back from the effect of the current situation. Over the long run, any businesses accessing the deferral of loan repayment packages will be in a worse situation as interest will continue be charged when payments are deferred.
3. The increase in the Immediate Write Off Asset Threshold is something that GCCI has asked for previously and is very welcomed. However, the benefit of this tax deduction will likely not be seen until May 2021 with a reduction of tax payable at that date. This is assuming that these businesses will have made a profit. In the current situation we have also received feedback that businesses are not likely to spend significantly on assets due to the uncertainty of the situation.
4. The payroll tax concessions will assist with cash flow in the coming months. However, a package similar to Victoria, who are refunding payroll tax paid this financial year, is an immediate cash inflow to businesses that may result in businesses keeping employees in jobs.
GCCI has written to Glenn Butcher MP, Ken O’Dowd MP and Mayor Matt Burnett to highlight these issues and asked that they work with Chamber to lobby for additional incentives for businesses struggling through the economic effects of COVID-19.
GCCI has requested that they assist Chamber with lobbing for a wages incentive where the government will cover 80% of wages paid in the event that businesses are forced to close or reduce operations. A similar incentive has been announced in the United Kingdom.
Secondly, Chamber believes that a freeze, or significant discount, on interest charges is required to incentivise businesses to utilise the loans being offered by banks.
Thirdly, we highly advise that the current Queensland Back to Work incentives should adapt to include a ‘retain employees’ provision to incentivise employers to maintain staff over the next few months.
“In concept this would essentially bring forward the payment of Back to Work incentives for employers who lay off employees now and then put on additional staff in the coming months when business returns to a more normal level.”
Finally, the Chamber has requested payroll tax refunds as detailed at point 4.
GCCI welcomes the Government stepping in to help businesses keep their employees, but we must face the cold hard fact that we will not be able to save every business or every job. Without immediate cash injections we believe that many businesses will not be able to continue and consequently they will not be able to access the current stimulus being offered in full.
MEDIA INFORMATION: For further information contact GCCI on 0448 333 121 or email firstname.lastname@example.org